6.3 Collateral Fee Processing

This topic provides information on Collateral fee processing for collateral Maintenance.

Collateral fee supports below types of fee processing.

• Recurring Fees
• Event Based Fees

Event based: Event based fee is collected as and when event happens. Hence they are advance in nature and collected upfront. While create event fee can be collected only once, other event related fees can be collected multiple time as and when the event happens. Event fee can be collected through manual liquidation or auto liquidation (except expiry fee which is always auto liquidation).

Event based fees can be amortized from liquidation date till collateral end date based on accrual frequency configured at the fee class level. For multiple event based fees, separate accrual entries will be triggered. Even for same event fee liquidated multiple times (like suspend fee on different dates), amortization is done from the liquidation date till collateral end date.

Holiday setting is not applicable for event based fee.

Recurring Fees: Recurring fee configured on a collateral can be liquidated manually or automatically as per the liquidation frequency signified at fee class level. Accrual entries are triggered based on accrual frequency and liquidation entries are triggered based on liquidation frequency.

Collected fee are collected from fee funding account configured at entity level.

This topic provides the information on Collateral Fee Processing. Steps involved in processing fees.

• Defining rules and attributes for Collateral fees:User can define rule for fees based on SDEs for events such as collateral_create, Collateral_expy, Collateral_extn, Collateral_React, Collateral_Susp and for Collateral_amt.
• Defininga class for fees:User can define a class for fees based on the holiday preferences maintained in the Fee and Accounting Class Maintenance. Holiday processing is not applicable for event based fee.
• Specifying fee details in Collateral:Based on fee rules with holiday preference parameters from fee class, specify collateral specific fee details for each fee rule at collateral level.

  For more details, refer to below documents.

  Refer to Fee Rule and Fee Class section in Enterprise Limits and Collateral Management Common User Guide.

Oracle Banking ELCM provides capability to capture and compute fees based on balances for recurring collateral fee and for different events as and when triggered.

Following SDEs which corresponds to events at the collateral level are provided to configure fee ruleswhich in turn is used in fee class associated with collateral and reckoned for fee calculation on occurring of these events. For recurring fee separate SDE is provided.

Table 6-32 SDEs and Description

Code	Description
COLLATERAL_CREATE	Collateral creation
COLLATERAL_EXPY	Collateral expiry
COLLATERAL_EXTN	Collateral extension
COLLATERAL_REACT	Collateral reactivation
COLLATERAL_SUSP	Collateral suspension
COLL_AMT	Collateral amount(Recurring fee)

Examples of event based fee with holiday processing

• Holidayprocessing for fees is applicable only to recurring fees if opted and is handled as below.

1	-	Holiday			-	-	-	-
	Liquidation Freq	Ignore Holidays	Holiday Level	Movement	Collateral Creation Date	Next Liquidation Date	Holiday	Actual Liquidation Date*
	Monthly	No	NA	NA	02- Aug	02-Sep	Yes	02- Sep
	Monthly	No	Local/Currency/Both	Forward	02- Aug	02-Sep	Yes	03- Sep
	Monthly	No	Local/Currency/Both	Backward	02- Aug	02-Sep	Yes	01- Sep
2	-	Holiday			-	-	-	-	-
	Liquidation Freq	Ignore Holidays	Holiday Level	Movement	Collateral Creation Date	Next Liquidation Date	Holiday	Actual Liquidation Date*	Cascade Schedules
	Monthly	No	Local/Currency/Both	Forward	02- Aug	No	Yes	03- Sep	Yes
	Monthly	No	Local/Currency/Both	Backward	02- Aug	No	Yes	01- Sep	No
3	-	Holiday				-	-	-	-
	Liquidation Freq	Ignore Holidays	Holiday Level	Movement	Across Month	Collateral Creation Date	Next Liquidation Date	Holiday	Actual Liquidation Date*
	Monthly	No	Local/Currency/Both	Forward	Yes	30- Aug	30- Sep	Yes	01-Oct
	Monthly	No	Local/Currency/Both	Forward	No	30- Aug	30- Sep	Yes	29-Oct
4	-	Holiday				-	-	-	-
	Liquidation Freq	Ignore Holidays	Holiday Level	Movement	Across Month	Collateral Creation Date	Next Liquidation Date	Holiday	Actual Liquidation Date*
	Monthly	No	Local/Currency/Both	Backward	Yes	01- Aug	01- Sep	Yes	31- Aug
	Monthly	No	Local/Currency/Both	Backward	No	01- Aug	01- Sep	Yes	02- Sep